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Thermo Fisher Scientific Inc (NYSE:TMO)
Beneish M-Score
-2.64 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Thermo Fisher Scientific Inc has a M-score of -2.64 suggests that the company is not a manipulator.

TMO' s 10-Year Beneish M-Score Range
Min: -2.88   Max: -1.12
Current: -2.64

-2.88
-1.12

During the past 13 years, the highest Beneish M-Score of Thermo Fisher Scientific Inc was -1.12. The lowest was -2.88. And the median was -2.51.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Thermo Fisher Scientific Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.0284+0.528 * 1.0022+0.404 * 0.8338+0.892 * 1.0464+0.115 * 1.0046
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9817+4.679 * -0.0214-0.327 * 1.1918
=-2.64

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $1,942 Mil.
Revenue was 3466.9 + 3191.8 + 3240.1 + 3191.5 = $13,090 Mil.
Gross Profit was 1481.7 + 1347.9 + 1363.2 + 1336.3 = $5,529 Mil.
Total Current Assets was $9,881 Mil.
Total Assets was $31,863 Mil.
Property, Plant and Equipment(Net PPE) was $1,767 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,000 Mil.
Selling, General & Admin. Expense(SGA) was $3,446 Mil.
Total Current Liabilities was $3,126 Mil.
Long-Term Debt was $9,500 Mil.
Net Income was 342.1 + 317.6 + 277.4 + 336.2 = $1,273 Mil.
Non Operating Income was -15 + -15.9 + -38.1 + 13 = $-56 Mil.
Cash Flow from Operations was 728.5 + 505.5 + 478.4 + 298.3 = $2,011 Mil.
Accounts Receivable was $1,805 Mil.
Revenue was 3259.3 + 3085.7 + 3108.1 + 3056.8 = $12,510 Mil.
Gross Profit was 1386.1 + 1298.4 + 1321.3 + 1289.7 = $5,296 Mil.
Total Current Assets was $4,835 Mil.
Total Assets was $27,445 Mil.
Property, Plant and Equipment(Net PPE) was $1,726 Mil.
Depreciation, Depletion and Amortization(DDA) was $984 Mil.
Selling, General & Admin. Expense(SGA) was $3,355 Mil.
Total Current Liabilities was $2,093 Mil.
Long-Term Debt was $7,031 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(1942.3 / 13090.3) / (1804.9 / 12509.9)
=0.14837704 / 0.14427773
=1.0284

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(1347.9 / 12509.9) / (1481.7 / 13090.3)
=0.42330474 / 0.42238146
=1.0022

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (9880.7 + 1767.4) / 31863.4) / (1 - (4834.8 + 1726.4) / 27444.6)
=0.63443638 / 0.76092929
=0.8338

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=13090.3 / 12509.9
=1.0464

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(983.7 / (983.7 + 1726.4)) / (999.9 / (999.9 + 1767.4))
=0.36297554 / 0.36132693
=1.0046

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(3446.3 / 13090.3) / (3354.9 / 12509.9)
=0.26327128 / 0.2681796
=0.9817

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((9499.6 + 3126) / 31863.4) / ((7031.2 + 2093.3) / 27444.6)
=0.39624146 / 0.33246978
=1.1918

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(1273.3 - -56 - 2010.7) / 31863.4
=-0.0214

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Thermo Fisher Scientific Inc has a M-score of -2.64 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Thermo Fisher Scientific Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.96350.99951.72650.4050.94640.990311.09440.94561.0284
GMI 1.00741.01331.09741.05950.97421.00640.97920.98020.97981.0022
AQI 1.00431.19261.2490.99820.95580.99371.01891.02381.00090.8338
SGI 1.16141.19361.442.57051.07710.9631.04561.09351.08231.0464
DEPI 0.7730.66241.89810.43010.97541.03251.04811.01810.95841.0046
SGAI 1.03861.01881.0120.89320.98061.02940.98411.03450.99790.9817
LVGI 0.83411.31740.68750.91340.90881.01291.02271.8861.0061.1918
TATA 0.0206-0.0201-0.0113-0.0341-0.0208-0.0365-0.0203-0.0146-0.0315-0.0214
M-score -2.25-2.46-1.12-1.77-2.56-2.70-2.54-2.67-2.62-2.64

Thermo Fisher Scientific Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.10391.09071.08170.96020.9190.94870.94861.00571.01861.0284
GMI 0.98070.98270.98010.97110.97530.97730.98530.99851.00051.0022
AQI 1.02871.02381.12351.04490.99451.00090.98820.96390.94720.8338
SGI 1.05021.09721.11891.11571.09911.07871.05961.04841.0441.0464
DEPI 1.09441.01810.97540.88870.89250.95840.9591.00650.99531.0046
SGAI 1.02591.03261.04621.0321.01340.99980.98280.98460.98120.9817
LVGI 1.85671.8861.26271.32451.05041.0061.02761.02580.93571.1918
TATA -0.006-0.0146-0.0157-0.032-0.0342-0.0315-0.0264-0.0222-0.0211-0.0214
M-score -2.64-2.67-2.43-2.68-2.67-2.62-2.62-2.56-2.52-2.64
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